Richmond, VA Federal Housing Finance Agency Home Price Index (FHFA HPI)

The Richmond, VA, Federal Housing Finance Agency (FHFA) house price index (HPI) is a weighted, repeat-sales index measuring average price changes in single-family houses with mortgages backed by Fannie Mae or Freddie Mac. The HPI covers all nine Census divisions and is released on a monthly basis with data available quarterly.

As of December 2020, the Richmond HPI was up 5.4% from a year ago and up 1.2% from the previous quarter. Home prices in the Richmond area have been rising steadily for the past few years, but at a slower pace than many other parts of the country. The relatively low cost of living and strong job market have made Richmond an attractive place to live, leading to increased demand for housing and higher prices.

The FHFA HPI is calculated using data from Fannie Mae and Freddie Mac's mortgage portfolios, which cover about two-thirds of all first-lien mortgages in the United States. The HPI includes both purchase mortgages and refinance loans; however, cash-out refinances are excluded. To be included in the index, a loan must have a term of less than 30 years and an original loan amount of less than $417,000 (the maximum loan limit for conforming loans).

The HPI is constructed using a "repeat sales" methodology, which compares sales pairs of the same property over time. A home that has been sold more than once is considered a "repeat sale." For each repeat sale transaction used in the index calculation, four key variables are recorded: 1) property address; 2) date of sale; 3) price; and 4) type of financing (conventional or government-insured). Properties that have been sold only once are not included in the index calculation because there is no way to calculate an accurate rate of change for those properties